Technology Creates Opportunity for Better Employment – Not Mass Unemployment

Many people are worried today that technology is taking away jobs. Concerns over robots replacing cashiers, pharmacists, automobile drivers, telemarketers, sewers, data entry keyers, document-reviewing software replacing lawyers, and more are not unfounded. Either computers/computer software is already replacing humans in these occupations, or they will be extremely likely to do so (Aquino; Thompson). People who look at the long-run effects, however, instead of short-run, will see that technology does not negatively affect employment in the long-term and improves our lives (McElroy; Bessen).

The type of unemployment that may be or will be experienced by workers due to technology advancements is structural – meaning that unemployment will likely be temporary as other job opportunities in other fields arise, sometimes from the technology advancements themselves. This is further legitimized by the fact that although we are experiencing more technology in fields replacing the role of human labor in bookkeeping, sales, and banking, we have three-quarters of a million more people occupying positions in those areas from 1999 to 2009 regardless of the tough economic times that the recession brought, according to the Occupational Employment Survey conducted by the Bureau of Labor Statistics (Bessen).

Interestingly, some people say that banking has been negatively impacted; but in reality, it has been more positively impacted by technology (Bessen). “Because ATMs perform many teller transactions, fewer tellers are needed to operate a bank branch. But because it costs less to operate a branch office, banks dramatically increased the number of branches in order to reach a bigger market. More bank branches means more tellers, despite fewer tellers per branch” (Bessen). In addition, relationship banking is still alive contrary to what some believe, because though tellers do not complete as many simple transactions as they once did, they are now completing the more complex tasks that can still make the customer’s experience personal (Bessen).

Though new technology in the textile weaving industry is an example of a dramatic decrease in labor – 98 percent – in the long-run people were made better-off. It does seems like mechanization brought hard times for the people working in the industry due to massive unemployment, but the greater demand for cloth due to a dramatic decrease in its cost quadrupled the number of textile industry jobs (Bessen).

Economist Walter Williams says that the telecommunications industry is a marvel of a seemingly overall massive job loss that turned into advancements in the industry that did not make us worse off, but better off (Williams). “In 1970, the telecommunications industry employed 421,000 workers as switchboard operators, annually handling 9.8 billion long-distance calls. Today the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss. What happened? The answer: There have been spectacular labor-saving advances in telecommunications. Today more than 100 billion long-distance calls a year require only 78,000 switchboard operators. What's more is the cost of making a long-distance call is a tiny fraction of what it was in 1970” (Williams).

Technology has time and again caused a painful transition for workers having to find jobs in other fields. Yes, we have had and do have an unemployment problem in the US, but that problem does not stem from technology (McElroy; Williams; Bessen). “Forbes pointed out that U.S. unemployment rates have changed little over the past 120 years (1890 to 2014) despite massive advances in workplace technology” (McElroy). Even though unemployment increased dramatically during the economic downturns such as the recent Great Recession and the past Great Depression and Panic of 1893 – those were problems caused not by increases in use of new technologies, but by financiers. It was through innovation by entrepreneurs and business that brought employment back up (McElroy).

Flickr image by Scott McLeod.

Structural unemployment exists because of technology, but this creative destruction allocates human labor to its best uses – those occupations that require the special human skills of creation, caregiving, problem-solving, and communication. The market’s power of “the invisible hand” will weed out the jobs no longer yielding more than the cost of the human labor to produce the goods or provide the services. However, attempts by government to stop creative destruction and prevent competition, such as the presence of monopolies and patents hurt our economy in the long-run, contrary to the positive effects of technology. By trying to stabilize employment by way of cronyism, the government hurts consumers by allowing companies the ability to raise prices artificially, and creates stasis by impoverishing employees (McElroy).

Though it is true that some human labor has been eliminated because of technology, new jobs have been created that are more valuable to our society than some jobs in the past (McElroy; Williams). Would it be economically beneficial today to employ such people as the milkman and the iceman who delivered to homes in the past, over going to the grocery store or using the ice-maker in a refrigerator? Taking into account wages and compensation in today’s prices, it makes economic sense that technology saves consumers money and has made life easier (McElroy; Williams). Creative destruction of technology has caused some structural unemployment, but the transition from the widespread use of ships and trains to cars and airplanes made unemployment shift, but not increase. In the long-run, the number of jobs in more valuable industries than past ones has brought innovation that has enriched everyone’s lives (McElroy; Williams; Bessen).

Without technology, there is a loss of innovation and progress that would decline our nation’s standard of living. People will lose opportunities to gain new skillsets and change their careers to fields that yield a greater amount of success (McElroy; Williams; Bessen). The need for new skills might even be the reason for stagnant wages (Bessen). Hindering technology would be hurting productivity and furthermore employment in new and/or better fields (McElroy; Williams; Bessen).



Aquino, Judith. "Nine Jobs that Humans May Lose to Robots." NBC News 2012. web. 20 February 2015.
Bessen, James. "Don't Blame Technology for Persistent Unemployment." Slate 30 September 2013: 1. web. 20 February 2015.
McElroy, Wendy. "#45 – Robots and Computerization Cause Unemployment." The Freeman 20 February 2015: 1. web. 20 February 2015.
Thompson, Derek. "What Jobs Will the Robots Take?" The Atlantic 23 January 2014: 1. web. 20 February 2015.
Williams, Walter E. "Job Destruction Makes Us Richer." Townhall 27 July 2011: 1. web. 20 February 2015.